The trust’s medical director John Randall gave an update on the business plan for Stamford Hospital to the board, and said: “Stamford is a vital part of our clinical footprint and our strategy going forward.”

After discussion the board approved five recommendations. Work on the hospital, which will involve refurbishment of part of the Ryhall Road site and the sale of the rest, could now begin in the next four to six months.

The first recommendation was to begin refurbishment and redesign of the east end of the site at a cost of £2.75m.

Mr Randall said this would enable the hospital to offer increased cancer services; extend hours in the minor injuries unit; add a second ultrasound machine; and expand the use of phlebotomy, among other additions. The site would be renamed Stamford Community Hospital.

The second recommendation was to postpone demolition of the old nurse accommodation block until further work was done to explore whether the site’s current tenants, such as the Evergreen Care Trust, could move into the building.

The third recommendation was to move forward with the marketing and sale of the western part of the site, which would generate up to

£3.6m.

Mr Randall told the board there were three issues to keep in mind. Firstly, the Gatehouse monument and Grade II listed buildings on the site; secondly the historic covenants stating the land should be used “for the benefit of the infirmary”; and thirdly, possible contamination of the land from past uses.

He said as a public body the trust was obliged to get the best value for money from the land, but added: “The aim has always been for the land to be used for health and social care purposes.”

The fourth recommendation was to apply for planning permission to demolish the existing Hurst Ward and build two new procedure rooms in its place, at a cost of up to £9.6m. These would deal with an extra 400 patients per week and would focus in particular local anaesthetic and endoscopy services.

And the fifth and final recommendation was to begin finding the extra money needed to complete the redevelopment work. The trust has identified £3.8m from its capital budget, which would be added to the proceeds of the sale of the western end of the site. This would still leave a shortfall of about £3m. The trust will apply to the Department of Health for extra funding.

The board also considered a request to fund a permanent MRI scanner for Stamford. Currently a mobile scanner visits for 13 days a month. A permanent unit would take the pressure off the two machines at Peterborough City Hospital, and enable patients from the Stamford area to be treated closer to home. The request was approved, providing the funds could be found.

If all goes to plan the refurbishment could be completed by summer 2016, with the procedure rooms finished by summer 2017.